I can bet that this has happened to many of us. The bad boy/ bad girl, that one our friends tries their best to get us away from. When you do eventually get away, you realise that, it was temporary insanity. The truth is, if you went back in time you would probably do it again. It is madness, but oh what a trip!
Human beings do insane things like this all the time. They fight for politicians who don’t care about them. Or, queue for hours in the bank for their own money.
Queues in Kenyan banks are always quite the spectacle. There are 12 counters available but really, only three are functioning. The line obviously moves slowly and precious hours are wasted waiting. To make matters worse, we are actually charged to wait in line. Hilarious, right?
My question is, are the three tellers the only employees in the bank? Where are the rest? They seem so busy with other things behind that wooden barrier. What, exactly, are they doing?
Let’s face it, we are not the bank’s major source of business, just like that boy or girl is not really into you.
The Banks’ Money Making Schemes
The major product that banks deal with is money. Banks “buy” and “sell” money and here is how it works:
- The banks advertise like crazy. KCB, Standard Chartered, Co-operative bank, just to name a few, all want your money. So they make themselves appealing to you, their future depositors.
- Once the depositors choose a bank of their liking, the banks “buy” the money. This means they pay depositors some amount of interest for saving their money there.
- They use this money to loan to other banks and people and charge a higher interest rate therefore making a profit.
Banks also make money through ATM charges, over the counter transactions, investments, forex trading, buying government securities like treasury bills and bonds and project financing. As we said last time, banks play a very vital role in maintaining the delicate balance of the economy and ensuring it grows.
With this important role, a country’s wealth in the hands of few. This sounds kind of risky. So how are they regulated?
Banking Rules, Regulations and Fraud.
Trying to understand the Kenyan banking policy is like trying to understand law books in a week. Its impossible unless you are a genius, have photographic memory or both. There are more than 20 laws and acts of parliament that guide the revenue collection, the use of this revenue, it’s return to the Kenyan populace, how it returns and at what rate it returns to you and I. Money is big business so the government tries to protect those making money as much as they can.
The prevalence of banking fraud has been on an increase over the past few years. According to a KTN news report, a Deloitte banking survey estimated losses of money through fraud to be at KES 4.1 billion. The insurance companies are not covering the banks over losses incurred by loss by paying 1.4 billion.
They estimate that this figure will rise to about 2 billion.
If you have never walked into a bank and been told that your money is not available, then you are lucky. This is not to say that it will happen to you soon, so do not panic. The insurance companies are here to save the day.
This however doesn’t make anyone of us feel safer. If the insurance companies have to cover more and more banks over fraud, it means that their premiums will not be as cheap. And it does affect you, you will get loans at a higher rate because the banks need to get back their money and it is no wonder that the ease of doing business in Kenya was rated 121 out of 189 by world bank. This is a drop from 117 in the world.
The rate of starting a business or even just improving ones life has become very expensive in Kenya. Its not a great surprise then, that more and more people are turning to M-shwari for banking services. In fact, 645,000 people have already joined M-shwari since it’s launch only 3 weeks ago.
Just like that bad boy/ girl who you need to leave, is also time to leave banks and find other solutions?